CAPE MAY COURT HOUSE — A North Wildwood doctor targeted by police with undercover officers posing as exotic dancers was acquitted Thursday of drug distribution and healthcare claims fraud.

The jury deliberated for about two hours before finding Dr. John Costino not guilty of nine drug counts and seven insurance charges.

Costino’s wife, Barbara, was not in the courtroom as the verdict was read, but in the hallway outside she hugged Costino and cried out, “Oh my God,” after hearing that he had been found not guilty.

Costino, who sat quietly as the verdicts were read, did not comment Thursday, but his defense attorney, John Tumelty, called the jury’s decision a victory for doctors.

“I think it’s a huge win for doctors and a message that they should be more concerned about practicing medicine without having to worry about becoming a target for overzealous law enforcement investigations,” Tumelty said.

He continued, “This was just a bad investigation, incompetently executed.”

Costino, who began practicing after graduating from medical school in 1971, was arrested on Sept. 14, 2007, at his practice on Surf Avenue.

Prosecutors charged that on seven separate occasions he prescribed the painkiller Percocet, a controlled drug, to two female law enforcement officers posing as dancers from Atlantic City and that he filed fraudulent bills totaling about $400 for the visits involving one of those officers.

Costino would eventually be indicted on multiple occasions — February 2008, August 2008, July 2009, August 2010 and January 2011. Two of those indictments were dismissed and a third was voluntarily withdrawn by the Cape May County Prosecutor’s Office, Tumelty said.

On Thursday afternoon, Prosecutor Robert Taylor gave a brief comment by phone about the verdicts. “We respect the decision of the jury even if we don’t agree with it,” he said.

The many indictments and motions in the case, as well as changes in who was handling the prosecution, delayed a trial date. Ultimately, five prosecutors were involved at one point or another after Costino’s arrest. Assistant Prosecutor Dara Paley had the job of presenting the case to a jury when the trial finally began Oct. 9.

She argued that Costino prescribed the drugs simply because the women asked for them.

“The defendant gave illegal drugs to people just because they wanted it. Sounds like a drug dealer to me,” Paley said during closing arguments Wednesday night.

The quick verdict after so many years, Tumelty said, speaks volumes “about the way government agencies went about targeting Dr. Costino.”

“They went in to try to make a case with fake patients,” Tumelty said. “I think they went after him simply because he was one of the few doctors in our area to prescribe Suboxone, which means he treats those with drug addiction.”

Costino, Tumelty said, “was more worried about helping the patient than he was about practicing defensive medicine.”

Investigators sent the two undercover officers into Costino’s office between April 12 and Aug. 23, 2007, and had them ask for Percocet. Costino prescribed the controlled drug to the women, who he testified presented him with legitimate concerns given the nature of their physically demanding jobs as dancers in the clubs of Atlantic City.

“There was no question in my mind that she was a real patient. In no way did I think she was a police officer trying to put me in jail,” Costino told jurors when he testified Monday.

The investigation involved the Drug Enforcement Administration, the Cape May County Prosecutor’s Office, the U.S. Postal Inspection Service and the Little Egg Harbor Township Police Department, which provided one of the two undercover officers..

Costino had his medical license revoked in 2009, but Tumelty said Thursday that Costino is expected to get his license returned to him by the state in December.

“They destroyed his life for five years,” Tumelty said of the toll the investigation and criminal case took on Costino.

Contact Trudi Gilfillian:

609-463-6716